Tracking Power

Not on track
Charles Devaux Ibtnswmmthe Unsplash

Renewable power

More efforts needed

Share of renewables in power generation in the Sustainable Development Scenario, 2000-2030

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Overview

In 2018, renewable electricity generation rose 7%, with wind and solar PV technologies together accounting for 65% of this increase. Although the share of renewables in global electricity generation reached 25% in 2018, renewable power as a whole still needs to expand significantly to meet the SDS share of almost half of generation by 2030. This requires the rate of annual capacity additions to accelerate; however, renewable capacity growth stalled in 2018 for the first time since 2001.
Tracking progress

Of all energy sources in the electricity sector, renewables had the highest rate of generation growth in 2018. Renewables-based electricity generation increased by 7% (almost 436 TWh) – larger than Canada's entire renewable electricity production, and faster than the 6% average annual growth since 2010.

Solar PV, hydropower and wind each accounted for less than one third of 2018 total electricity generation growth, with bioenergy representing most of the rest. Taken together, renewables fuelled more than 48% of the world's increase in electricity generation, and they now account for more than 25% of global electricity output, second after coal.

Renewable power overall needs to sustain annual growth of 7% over 2019-30 to meet the SDS level. This will require faster deployment of all renewable technologies including hydropower, which represented 65% of global renewable generation in 2018, but on the contrary, the rate of annual renewable capacity additions did not rise last year.

Solar PV is still on track with the SDS, with generation increasing by almost 32% in 2018 thanks to continuous policy support and cost reductions. In addition, the tracking status for bioenergy was upgraded from "needs improvement" to "on track". Several policy and market developments in China contributed significantly to this status change.

Renewable power generation by technology in the Sustainable Development Scenario, 2000-2030

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For all renewable power technologies, the long-term stability of targets and policies is essential to ensure investor confidence and continued growth. At the same time, policies need to continuously adapt to changing market conditions to achieve greater cost-competitiveness and improve integration of renewables into the system.

Different policy instruments have been used to support renewable electricity deployment through different stages of technological maturity. Options include administratively set feed-in tariffs or premiums, renewable portfolio standards, quotas and tradeable green certificate schemes, net metering, tax rebates and capital grants. Some of these instruments have been introduced in parallel.

Recently, auctions (for centralised, competitive procurement of renewables) have become increasingly widespread and have been instrumental in discovering renewable energy prices and containing policy costs in many countries, especially for solar PV and wind.

However, the success of such policies in achieving deployment and development objectives relies on their design and ability to attract investment and competition.

Distributed solar PV expansion, driven by rapid cost reductions and policy support, is transforming electricity markets. The rapid adoption of residential, commercial and industrial PV systems is blurring the roles of electricity producers and consumers in many countries. This trend deserves careful attention from policy makers.

Currently, some distributed solar PV policies – such as buy-all, sell-all and annual net metering with retail-price remuneration – can have undesired effects in the long term. Unmanaged rapid growth of distributed PV can disrupt electricity markets by raising system costs, challenging the grid integration of renewables and reducing the revenues of distribution network operators.

Sustainable distributed PV deployment therefore depends on sound market design as well as policy and regulatory frameworks that balance the opposing interests of distributed PV investors, system operators, distribution companies and other (non-PV) electricity consumers. Tariff reforms and appropriate policies will be needed to attract investment in distributed solar PV while also securing enough revenues to pay for fixed network assets and ensuring that the cost burden is allocated fairly among all consumers.

Increasingly competitive, renewables – especially solar PV and wind – are rapidly transforming power systems worldwide. However, reforms to market design and policy frameworks will be needed to ensure investment at scale both in new renewable capacities and in power system flexibility to integrate high shares of variable renewables in a reliable and cost-effective manner.

As variable renewable energy shares increase, policies ensuring investment in all forms of flexibility become crucial.

These include, for example, policies and measures to:

  • enhance power plant flexibility by improving operations of the existing conventional fleet
  • unlock demand-side management, for example by allowing the participation of pools of consumers in the system services market
  • support energy storage
  • improve and enhance grid infrastructure

Some renewable technologies are still relatively expensive and/or face specific technology and market challenges, so require more targeted policies.

These policies could address:

  • better remuneration of the market value of storage for concentrating solar power (CSP) and pumped-storage technologies
  • timely grid connection and continued implementation of policies that spur competition to achieve further cost reductions for offshore wind
  • improved policies to tackle pre-development risks for geothermal energy
  • larger demonstration projects for ocean technologies

Other policy actions are needed to reflect the multiple benefits of bioenergy for electricity, including rural development, waste management and dispatchability.

As the transport, heating and cooling, and power sectors become increasingly interdependent, cross-linked decision making and policies designed to be beneficial across sectors will be crucial.

For example, the success of electric vehicle (EV) deployment will depend critically on the strengthening of electricity distribution networks and smart charging systems at the local level.

Renewable power technologies

Solar PV remains on track with the SDS, with generation increasing by over 30% in 2018 thanks to continued policy support and cost reductions. Bioenergy for power is also on track, with recent policy and market developments indicating accelerated deployment in coming years.

The tracking status of onshore wind, offshore wind and hydropower remains unchanged as "more efforts needed", while concentrating solar power, geothermal and ocean power remain well below the growth rates necessary to meet clean energy goals.

Solar PV power generation in the Sustainable Development Scenario, 2000-2030

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Solar PV

Although capacity additions remained flat in 2018, solar PV generation increased 31% in 2018, and represented the largest absolute generation growth (136 TWh) of all renewable technologies, slightly ahead of wind and hydropower. Despite recent policy changes and uncertainties in China, India and the United States, solar PV competitiveness improved. Solar PV is still on track to reach the levels envisioned in the SDS, which will require average annual growth of 16% between 2018 and 2030.

Onshore wind power generation in the Sustainable Development Scenario, 2000-2030

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Onshore wind

In 2018, onshore wind electricity generation increased by an estimated 12%, while capacity additions only grew 7%. However, more efforts are needed: annual additions of onshore wind capacity need to increase much faster through 2030 to get on track with the SDS.

Offshore wind power generation in the Sustainable Development Scenario, 2000-2030

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Offshore wind

Compared with record 32% growth in 2017, offshore wind electricity generation increased only 20% in 2018. Given its relatively small base, offshore wind growth must accelerate even further to reach the generation levels demonstrated in the SDS. Cost reductions, technology improvements and rapid deployment achieved in Europe need to be extended to other regions.

Hydropower generation in the Sustainable Development Scenario, 2000-2030

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Hydropower

Hydropower generation is estimated to have increased by over 3% in 2018 due to continued recovery from drought in Latin America as well as strong capacity expansion and good water availability in China. This was a much larger increase than the 1.5% increase in 2017. However, capacity additions declined for the fifth consecutive year, putting this technology off track with the SDS, which requires continuous growth in new-build capacity to maintain an average generation increase of 2.5% per year through 2030.

Bioenergy power generation in the Sustainable Development Scenario, 2000-2030

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Bioenergy power generation

In 2018, bioenergy electricity generation increased by over 5%, just below the 6% annual rate needed through 2030 to reach the SDS level. Recent positive policy and market developments in emerging economies indicate an optimistic outlook for bioenergy, supporting its "on track" status.

Concentrating solar power generation in the Sustainable Development Scenario, 2000-2030

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Concentrating solar power (CSP)

Concentrating solar power (CSP) generation increased by an estimated 17% in 2018. Nevertheless, CSP is not on track with the SDS, which requires annual average growth of almost 26% through 2030. Policy design that emphasises CSP plant storage value will be key to attract additional investment.

Geothermal power generation in the Sustainable Development Scenario, 2000-2030

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Geothermal

Geothermal electricity generation increased by an estimated 5% in 2018, more than the average growth of the five previous years. Nevertheless, the technology is still not on track to reach the SDS level, which would require a 10% annual increase in generation over 2018‑30. Policies tackling challenges associated with pre-development risks are needed to increase the deployment of geothermal for power.

Ocean power generation in the Sustainable Development Scenario, 2000-2030

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Ocean power

Electricity generation from marine technologies increased an estimated 16% in 2018. Although this increase is significantly above levels observed over the last three years, the technology is not on track with the SDS, which requires a much higher annual growth rate of 24% through 2030. Policies promoting R&D are needed to achieve further cost reductions and large-scale development.
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